Facilities and administrative (F&A) rates are the mechanisms used to reimburse the
University for the infrastructure costs, i.e. F&A costs, associated with sponsored
research and other sponsored agreements. F&A rates are essentially overhead rates,
calculated as a percentage of the direct costs of sponsored projects. These are actual
costs to the University and directly support sponsored projects being performed by
the University of Utah. Sometimes F&A rates are referred to as indirect cost rates.

Off Campus Rate

An off-campus rate of 26% can only be used if the administrative structure of the
project is relocated from the University of Utah and its affiliates for more than
120 days. Use of this rate requires pre-authorization from Compliance Accounting.

F&A Cost Calculations

F&A cost rates are based on Modified Total Direct Costs (MTDC), which is the total
direct cost less:

Equipment above $5,000

NSF participant support costs

Patient care costs

Subcontract expenses in excess of $25,000 for each subcontract

F&A is typically applied to MTDC. This is referred to as the "F&A Base". For assistance
developing a budget that spans varying F&A rates, use our budget calculator. Read more about F&A cost calculations in the Research Handbook.

If a project's investigators are employed across college or departmental lines, companion
projects or a statement of the intended distribution of F&A costs may be necessary
for each sponsored project at the time a proposal is submitted. The Intercollegial/Departmental Agreement on the Distribution of F&A Costs (doc) can be used to detail the intention to split F&A or establish companion projects
at time of award. The form should be uploaded into the Document Summary Sheet (DSS)
in eProposal.

The University does not waive indirect costs on undergraduate student salaries. Instead,
the University provides a financial incentive to encourage meaningful undergraduate
participation on sponsored research projects. The University - at time of award setup
- will calculate F&A collected for undergraduate salaries and put these funds toward
the direct costs of the project or post-award Grants & Contracts Accounting (GCA)
will automatically return overhead on any undergraduate salaries expended on research
projects. This is a pre-approved institutinal waiver that requires no additional authorization.
Read more on waivers in the Research Handbook

The proposal budget submitted to the sponsor should include all applicable F&A. The
University does not waive overhead on undergraduate salaries, we collect it and return
it (on the back end) to the PI in support of the project. The budget sent to OSP to
set up the project should also include all applicable F&A.

This practice used to apply only to NSF Research for Undergraduate (REU) projects
but has been expanded to include any project that includes undergraduate salaries.

F&A costs are defined in OMB Circular A-21 as costs that are "incurred for common
or joint objectives and therefore cannot be identified readily and specifically with
a particular sponsored project, an instructional activity, or any other institutional
activity." F&A costs are sometimes referred to as indirect costs. Examples of F&A
costs include:

Operating and maintenance costs such as utility costs, security costs, and custodial
costs.

Common administrative functions such as payroll and purchasing

Sponsored project administration

Because it is impractical to account separately for such costs. F&A costs are normally
not charged as direct costs to sponsored projects.

F&A rates are developed under the requirements of the U.S. Office of Management and
Budget Circular A-21, Cost Principles for Educational Institutions. The rates are
calculated according to the F&A Cost Rate Agreement for the University of Utah and
negotiated with our cognizant federal audit agency, the Department of Health and Human
Services (DHHS). The following rates are negotiated:

Organized Research (On-Campus)

Organized Research (Off-Campus)

Instruction (On-Campus)

Instruction (Off-Campus)

Other Sponsored Activity, i.e. Public Service (On-Campus)

Other Sponsored Activity, i.e. Public Service (Off-Campus)

All F&A costs within the University are assigned to cost pools related to primary
functions. Then a portion from each cost pool is attributed to the research enterprise
according to guidelines provided in Circular A-21. Totaling the portions of each cost
pool allocated to research yields the University's total F&A costs attributable to
sponsored research. The total is then converted into the F&A rate by dividing it by
"Modified Total Direct Costs" (MTDC).

MTDC includes the total direct costs of a sponsored project less the cost of equipment
over $5,000, capital expenditures, alternations/renovations, space rental costs, and
the portion of each subaward/subcontract in excess of $25,000 within a competing segment
of an award.

The actual F&A rates for most federally sponsored project awards are the standard
rates referred to in the University's F&A rate agreement. While it should be customary
practice to use the University's negotiated standard F&A rates on all sponsored projects,
there are certain exceptions in which not all sponsors can reimburse the University
for F&A costs at the negotiated rates. The following are some exceptions:

F&A costs are charged to individual awards as direct costs are incurred. The University
does not recover F&A costs from sponsors until direct costs are charged to the award.
F&A is typically applied to modified total direct costs (MTDC) of awards. This is
referred to as the "F&A Base" and is the same base on which the University calculates
and negotiates rates with DHHS. Read more on F&A cost calculations in the Research Handbook.

MTDC represents the total direct costs of a sponsored project less the cost of equipment
over $5,000, capital expenditures, alterations/renovations, space rental costs, student
stipends, tuition, scholarship and fellowships, participant support costs, and the
portion of each subaward/subcontract in excess of $25,000 within a competing segment
of an award.

Action

Amount

A researcher buys supplies on an award

$100

The actual F&A rate on the award

51% (based on FY17)

The University collects the F&A cost associated with that direct cost (supplies)

$51

The same researcher purchases a piece of equipment for $10,000

No F&A cost would be collected on that particular direct cost (equipment over $5,000)